Interested to Buy Any Domain ? << Click Here >> for more details...
What is GR/IR account? Why do you maintain that? Explain the
importance of GR/IR clearing account.
- 19 Answers
- 234566 Views
- IBM, Nipuna, Orica, TE, I also Faced
- E-Mail Answers
Answer Posted / joe sherwod
Firstly, what does the acronym GR/IR stand for, as this
answer is instructive as to the purpose of this account ?
GR/IR = Goods Received/Invoice Receipt
This account is used as an interlocking account, to
reconcile the accounting values between the 2 processes of
receiving goods ordered from a supplier and receiving the
supplier’s invoice for those goods. These 2 processes can
occur in either order i.e. invoice arrives first, goods
arrive later, or, conversely. The total value of the goods
received (unit price * unit cost) should be the same as
reflected on the invoice, in which case this interlocking
account will net-out to zero.
Thus, assuming goods receipt occurs first, the following
accounting entries would be effected :
Goods received :
Dr. Inventory
Cr. GR/IR account
Invoice received :
Dr. GR/IR account
Cr. Accounts Payable
Therefore, as an interlocking account between these 2
processes, the GR/IR account should net to zero, (Dr. =
Cr.) and, in doing so, prove that the value of the goods
received = the value of the goods invoiced. If these 2
amounts don’t reconcile, then we need to investigate the
reason(s) for this variance, e.g. shortfall in supply.
Actually, I believe that if would be more helpful to
reverse the account name to the IR/GR account, as this
helps to remember that the offset account posting from the
invoice is debited to the IR/GR account (debit being on the
left-side) and the offset posting from the goods receipt is
credited to this account (i.e. right-hand side of the
account). Thus, IR on the left, GR on the right.
| Is This Answer Correct ? | 62 Yes | 3 No |
Post New Answer View All Answers
What are fi validation rules?
Differentiate activity-dependent and activity-independent costs? : co- cost center accounting
What is splitting? Explain the splitting structure? : co- cost center accounting
What is the importance of gr/ir ( good received/ invoice received) clearing account?
How do you create cost center in system? What are the requirements? : cost center accounting
What are one-time vendors?
while performing the standard cost estimate will it be generated accounting entries?
What are statistical internal orders? : co-pa
Hi, Here is an interview question. What are errors we will face in FI-MM, FI-SD, COPA integration. How u will solve. Sravan
What is a shortend fiscal year?
Currency gain - loss at PPV, how is it possible to split the PPV in: 1. Price related PPV and 2. Currency related PPV?
Is it possible to calculate depreciation to the day?
How is cost center accounting related to profit center?
How are tolerance group for employees used?
explain house bank flow without telling the configuration
